Moody's affirms Directed Electronics

Moody's Investors Service said it affirmed the debt ratings of Directed Electronics Inc., including the B2 senior implied rating, the B2 rating of the $25 million senior secured revolving credit facility due 2009, and the B2 rating of the $156 million senior secured term loan due 2010, following the company's signing of an agreement to purchase Definitive Technology.

Moody's said it recognizes the meaningful risks presented by the debt-financed acquisition, particularly given Definitive's low market share in a fragmented industry and its high customer concentration.

Nonetheless, the ratings affirmation reflects the leverage-neutral structure of the acquisition, its alignment with Directed Electronics' long-term strategies and strong cash flow characteristics, and its consistency with Moody's expectations.

The outlook remains stable.

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